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Do Safety Nets Promote Technology Adoption? Panel data evidence from rural Ethiopia

Yonas Alem and Nzinga Broussard

No 556, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We use panel data from rural Ethiopia to investigate if participation in a safety net program enhances fertilizer adoption. Using a difference-in-difference estimator and inverse propensity score weighting we find that participation in Ethiopia’s food-for-work program increased fertilizer adoption. Results also indicate that the likelihood of adopting and the intensity of fertilizer usage increased with livestock holdings for food-for-work-participant households providing some evidence that the intervention helped asset-rich farm households more than asset-poor households. We find no significant effects of free distribution on fertilizer adoption or intensification. Our results are consistent with the hypothesis that safety nets can be viewed as mechanisms that allow households to take on more risk to pursue higher profits. The paper highlights important policy implications related to the inter-related dynamics of safety nets and extension services that aim at promoting productivity enhancing modern agricultural technologies.

Keywords: Safety Net; Fertilizer Use; Inverse Propensity Score Weighting (search for similar items in EconPapers)
JEL-codes: O12 O33 Q12 Q16 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2013-02-28
New Economics Papers: this item is included in nep-afr, nep-agr and nep-dev
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